April 14, 2014

As state lawmakers debate the prospect of legalizing Internet gambling, they’re focusing largely on whether the practice will help boost casino profits and tax revenue. Drawing less attention is the question of what more Internet gambling could mean for millions of gambling addicts like John.

A New Jersey resident, John was working at a financial firm within blocks of the World Trade Center when the planes hit the towers in September 2001, killing thousands of people, including several of his friends. In the weeks after the attack, John would spend hours at a time reading news online, trying to distract himself.

One day, as he was scrolling through headlines, a pop-up window appeared from an online casino called Bodog, offering an escape from anxiety. John had gambled in high school, betting on sports with the help of a friend’s father who was a bookie, but had dropped the habit in college and moved on.

But that day, the enticements from a new, electronic bookie seemed irresistible, and John started placing bets once again. He started small, betting five or ten dollars at a time on sports and blackjack. The stakes grew over the next several years until he was betting $1,000 on each game. Soon, he didn’t have money to fuel his habit, so he borrowed against the house he shares with his wife and three kids in northern New Jersey.

In June 2008, as he was falling deeper into debt, a client called looking for an investment. John told her about a certificate of deposit and asked her to write a check in his name, and rather than deposit it, he used the money to gamble. “I told her the CD was a five year CD, so I didn’t have to worry about this for five years,” he said. “In my twisted mind I thought of it as a loan.”

By the time the company caught him, in February 2010, John had taken nearly $2 million from a handful of clients and $75,000 from his grandparents. He eventually pleaded guilty to two counts of theft and was sentenced to six years in prison, though he was released on parole two years ago (his parole officer requested he keep a low profile, so John asked that his full name not be used).

“I knew it was wrong, but I still couldn’t wait to get that bet in,” he said. “The rush you feel is like any drug addict feels a high.”

The Internet proved to be the perfect forum for his addiction. It offered anonymity, protecting him from any shame he might feel if he were facing a dealer or other gamblers. And it was always there. “My wife used to work nights. She would go to work, the kids would go to bed, and I would gamble from eight at night till four in the morning,” he said. “I fell asleep in the chair a couple of times gambling. It was terrible.”

At the time, no state had legalized online gambling yet, but millions of Americans like John bet through Internet casinos based overseas.

Proponents of legalized gambling point to cases like John’s to say that online gambling is occurring anyway, and that regulating it can help protect addicts. New Jersey’s Internet gambling law, passed last year, requires that casinos operating betting sites contribute $250,000 annually to fund programs for gambling addicts. The law additionally requires these sites include ways for players to set limits for themselves on the amount they can bet or the length of time they can play.

Proponents also point out that billions of dollars in gambling taxes fund popular state programs like property tax relief and other financial assistance programs for seniors.

But some opponents warn that cases like John’s will become increasingly common if more states allow online betting. Last year, the American Psychiatric Association classified problem gambling, as it’s known, as an addictive disorder, and millions of Americans show signs of the disease. What’s more, gambling critics say, a body of research shows that even beyond the problems with addiction, state-sanctioned casino gambling is simply bad public policy.

In the 1990s, for example, Earl Grinols, an economist at the University of Illinois who now teaches at Baylor University, began comparing revenue brought in by casinos with societal costs, such as increased crime and shuttered small businesses, and found that the costs outweighed the benefits 3-to-1. Another troubling figure comes from a handful of studies conducted over the past twenty years in the U.S., Canada and Australia, which estimate that anywhere from a third to more than half of casino revenue comes from gambling addicts.

Relatively little research has focused on whether online betting presents unique problems for addicts, said Keith Whyte, executive director of the National Council on Problem Gambling, an advocacy group that pushes for responsible gambling policy but does not take a position on whether states should legalize gambling. While some studies suggest that people who gamble online tend to have higher rates of addiction, Whyte said, there’s no way to tell whether that’s caused by some trait unique to betting online, or whether gambling addicts are simply more likely to place wagers on the Internet than other people.

For John, online betting combined two addictive activities — gambling and surfing the Web — each of which offered a convenient escape from his stress. His settlement includes a restitution agreement that has him making monthly payments to his grandmother — his grandfather died last year — and he must reach an agreement with his former employer, which paid back the clients he had stolen from. He works two restaurant jobs, which don’t pay enough for him to settle the claims anytime soon, he said. “I’ll be paying restitution the rest of my life.”

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